Nobody said I couldn’t do a Friday bullet points post about just one topic, so here I am. Future me will no doubt like this post. And the topic of the day is going to be Enad Global 7, their Q2 2022 financials, and a few related tidibits.
There are a few sources of information about their earnings and I will list out all the links at the bottom of the post for those looking for more.
- Hey We Made More Money
Enad Global 7 reported some serious year over year returns, though that number is helped along by the fact that Q2 2021 wasn’t lighting anybody on fire. Still, the numbers look good and have been on the rise since that low point.
Games seem to be taking on a bigger role in the revenue mix, which was about split with services a year ago. Also, it is about 10 SEK to the USD right now, so you can just divide by ten to get the approximate value in dollars. I guess that works for Euros now that there is parity between the Euro and the dollar. For GB Pounds, though, you’re on your own there.
When we look at the game revenue it looks like Daybreak rules the roost, bringing in 75% of that particular pie.
- LOTRO hits a Recent High
The EG7 future game plan still rides a lot on Lord of the Rings Online, referencing Amazon’s Middle-earth saga and the coming revamp in the middle term plans.
They also mentioned that the 15th anniversary of the game raised number of players logging into the game to its highest level since 2016. It is hard for me to judge exactly what that means. Sure, more is always better, but was 2016 a benchmark year? A high water mark of some sort? Or just a point on the graph downward from the initial free to play conversion numbers?
Left unmentioned was whether the recent acquisition of the Tolkien IP rights by the Embracer Group would have any impact on the future plans for the game.
- Norrath Expansions
Not that I doubted there would be expansions for EverQuest and EverQuest II. They are there in the game roadmaps for the year. But it is nice to get that in writing from the company. Daybreak… I mean EG7… has changed their minds on things suddenly in the past.
In addition, in the Q&A transcript, the following was said about the expansions:
And the upcoming annual expansion packs for EverQuest and EverQuest II, large updates that perform well every year.
They perform well every year, eh? That financial insight we got from EG7 before the acquisition, that was cut off in 2020 before the expansions for either title shipped. I wonder how much that would have boosted their numbers.
- Done with Acquisitions for Now
The word “organic” comes up a lot in their presentation and the investors call. Organic growth refers to growing the revenue for their current titles and services, as opposed to driving it up by acquiring other companies.
During the investor call they didn’t say that more acquisitions were out of the question, but they did declare it was a very different market than it was over the last couple of years, so it sounds like they’re not going to be pursing other companies the way they did in 2020 and 2021.
Instead, they will be focused on growing the current titles… and becoming some sort of consulting business or something.
- Reverse Merger Complete
Finally, one of the big announcements on the agenda was the ascension of Jason Epstein, the second largest shareholder in the company, the the position of chairman of the board, where he will take a more active roll in the overall running of the company. Meanwhile, Ji Ham continues to hone his dramatic talents as Acting CEO of Enad Global 7.
I speculated last month that Daybreak was in the process of completing a reverse merger, that the company that was acquired was going to end up owning the company that did the buying.
This is what the end game of such a move looks like, with the players in the former taking over key positions in the latter.
All I can says is, “Epstein, you magnificent bastard!” I did not, however, read his book.
- EG7 – Q2 2022 Financials Presentation
- Market Screener – Interim Report for Q2 2022
- Yahoo – Transcript of the earnings call
- Embracer Group – Announcement of the Middle-earth Enterprises acquisition
- Massively OP – EG7 Q2 2022 – Daybreak’s Jason Epstein is now chairman of the board